New York Markets After Hours

S&P cuts Chicago outlook on pension concerns

NathalieTadena

Standard & Poor's Ratings Services lowered its outlook on Chicago to negative from stable, citing risks involved in how the city will address its upcoming large pension payments.

Chicago's overall unfunded liability of the four plans is $19.4 billion as of 2012, up from $11.9 billion in 2009. The plans altogether are 35% funded, the ratings firm said.

S&P, which affirmed Chicago's rating six levels into investment grade at A-plus, said the city has a very weak budgetary performance as well as a very weak debt and contingent liabilities position. However, Chicago benefits from a broad and diverse economy, given its status as a major regional economic center, and has adequate budgetary flexibility.

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